Vietnam's Leading Manufacturing Sectors

Apparel

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Backpacks

Seditex Sourcing Services

Factory introductions (by email)

We will identify factories who match your requirements. We will provide you with information about the factories with all the necessary contact details so that you can communicate directly with them. We give you first name, last name, title, email and phone number of contact person. The only things we guarantee is that they are able to make your product and they will reply to your email. This is our most basic Sourcing company in Vietnam service. Quick, cheap and reliable way to get in touch with factories you can trust.

Factory visits

We will take you there! We are happy to arrange for you to visit the factories and escort you during the visits for guidance and translation. If the factories are in Ho Chi Minh City then transportation is included. If we need to travel outside of Ho Chi Minh City then transportation is not included in our sourcing company in Vietnam factory visit service.

Costing

We will work with the factory to get initial pricing based on your specifications. If you want, we CC you in all the emails to be transparent. You will then deal directly with the supplier when you do the final order negotiation/confirmation. We will require a target price to allow us to yield better results. We are a sourcing company in Vietnam, not an agency.

Merchandising

We can manage choosing fabric, trims, accessories and design improvements. We can manage sampling, approvals, production planning, shipping documentation and more. The goal is to get you a final landed price and samples for approval. We interpret your original ideas and work with factories to figure each component and how to put it all together. This is our full service sourcing company in Vietnam offer. Our service fee is based on a fix amount, not commission.

Factory assessments

We perform audit visits to the factories to evaluate the level of social & environmental compliance. We perform compliance assessments of the factory you choose to evaluate the level of social & environmental compliance. We produce a comprehensive report with pictures as well as a CAP (corrective action plan). Do other sourcing companies in Vietnam offer this?

Consulting for factories

We provide guidance to factories to improve quality, productivity, social and environmental compliance.

Consulting for investors

We give legal, logistical and business advice for investors who want to setup a factory or buying office or conduct any other activities in South East Asia.

Staff search

We will help you find a qualified staff to work for you in Vietnam. The service includes a 1 month ad in VIETNAMWORKS website, filtering of CV's, 1st interviews with reports, and coordination of 2nd interview with you on Skype. This is an example of our sourcing support company in Vietnam bonus services.

Hosting

Are you looking for an interim solution to test the waters before committing to opening an office in Vietnam? Or, do you want to setup your team in an active environment with access to an existing network without the hassle of finding a place to rent?

Quality control inspections

We have a team of experienced QA and QC.Depending on the reliability of the factory we recommend adapted inspection processes.Typically we recommend a 3-step process:

A. Pre-production meeting: when the production green light is given and all components are in the factory, before starting cutting, we will meet with the factory key players (management, departments leaders and factory QC).We will check if components in house are conform; we check if all technical information is unambiguous and clearly understood (if not we take necessary steps to clarify), we do a risk assessment where we identify the manufacturing operations that are likely to cause quality concerns and we take preventive measures with the factory to control these operations; and we check the production plan to ensure the due shipment date can be met.

B. In-line inspection:Depending on order size and inspection results we perform one or more inspections when the production is ongoing.Ideally we perform the 1st inline when the first pieces are completed. We will scrutinize the first finished goods as well as each manufacturing operation. We also audit the factory internal QC process. We make sure the supplier take corrective action when flaws are found to avoid recurring defects. If the quality is not satisfactory, we will return day after day till we are satisfied, but this extra cost should be supported by the factory. Depending on order size and risk we will perform additional inline inspections when 25% and/or 50% of the order is completed.

C. Final inspection (or pre-final in case another independent inspection is carried out):When all goods are packed and ready for shipment we perform a random AQL inspection to assess the actual quality level of the goods. All inspections findings are reported in English with pictures either in a format you supply or in our standard comprehensive format.

Contact us today!

Client Testimony

Seditex has proven to be a most valuable asset with a high degree of integrity in the re-location of our manufacturing requirements from China to Vietnam.

We have no hesitation in recommending Seditex as a valued and trusted business partner for both sourcing and inspections.

A D Hurley/ Anthony D Hurley – DirectorSmitcare Limited – U.K. ‘

I highly recommend Frank :) and his team to those who want to expand their sourcing network in Vietnam!

- Sadik Gundemir, General Manager, Savcan

Making the move from China to Vietnam?

Is Vietnam really cheaper than China?

Often apparel sourcing managers get their first costing from Vietnam and they are surprised. “I thought Vietnam was the next rising star! Minimum wage in Vietnam is $US 170/month. China’s minimum wage is $US 325 / month. How come the Vietnam price is 1.5x greater than my China price?” There are three reasons: supply and demand, production experience and fabric cost.

My name is Frank. I am from Europe and have been living in Vietnam since 1999. I run a sourcing company in Vietnam called Seditex. More and more sourcing managers are contacting me and they all say the same thing. China is not working for us anymore; we need to find new factories in Vietnam. They expect Vietnam’s famous high quality at a cheaper price than their China price.

There is a low supply of Vietnamese factories with experience and capacity. There is a high demand for capacity – orders normally placed in China are looking for a new home. The problem is that Vietnam is small compared to China. In an article written by Dr. Sheng Lu he shows that, in 2017 China exported to the USA $US27 billion worth of garments whereas Vietnam only exported $US11.5. China has 10 million people working in the garment production business. Vietnam has 2.6 million. Vietnam is opening new factories every month, but will never be able to absorb all the orders running out of China due to the relative size of both countries.

The new factories popping up like mushrooms in Vietnam have great websites and will say yes to you without blinking an eye. But do they have the experience and sourcing abilities to deliver quality on time? Many of them don’t, so be careful. Hire a sourcing company in Vietnam that you can trust.

The supply and demand imbalance means that Vietnamese factories are not motivated to offer high quality at low prices. They offer high quality at high prices. Why should they go the extra mile to offer a price cheaper than China when they have enough customers willing to pay their China +1 price?

In the world, there is what I call the best-world-price (BWP) for every garment. The BWP is not just about price. The BWP takes into account customer service, payment terms, on-time delivery, quality control and factory certifications. I believe that China still offers the BWP because they are experienced, they have economies of scale and they produce everything in their own country.

The challenge for apparel sourcing managers today is to stay in China and find innovative factories that do offer the BWP. They still exist, they are just fewer. It is harder to get the BWP due to China’s transition from low labor cost manufacturing to high tech manufacturing. It is harder to get the BWP in China due to the Chinese government environmental crackdown. It is harder to hire the best Chinese factories because they are producing more and more for domestic consumers – not for export. It is harder to get the BWP in China because of rising labor cost in the legacy manufacturing cities like Guangzhou, Shaoxing and Huzhou. But still, China has the BWP price. A good sourcing company in Vietnam can help you find the BWP in Vietnam.

The second reason your initial Vietnam price will be higher than your China price is that Chinese factories have more experience in production processes and costing accuracy.

The Chinese have been mastering the art of garment production since the 1980s. Vietnam garment industry came of age when they joined the WTO in 2007. The Chinese have just been at it a longer and figured out all the tricks to maximize production efficiency. Efficiency comes down to how much time it takes to produce one garment with no mistakes. Whether you measure it by garments by line per day or standard apparel minutes.

Another reason Vietnamese factories have lower productivity is because many factories in Vietnam started off as state owned enterprises and operate very conservatively. The motivation, discipline and training to maximize productivity is not part of the legacy socialist management systems. The same is true for China but China is 30 years ahead of Vietnam in their evolution away from socialist management style.

Vietnam is learning and applying industrial engineering practices to improve production efficiency. They are using sewing templates. They are using folding boards. They are buying automated machines. They are using longer cutting tables. They are using standard allowed minutes to calculate costs. They are implementing software solutions like Intellocut and Intellobuy. In due time, Vietnam factories will become as productive as Chinese factories and the Vietnam price will become competitive - in line with its wage advantage.

Talking about costing accuracy, when quota restrictions still existed in Vietnam, past performance pricing was used to determine quota allocations and set pricing. Quota restrictions no longer apply but the mentality of gauging future pricing based on past performance pricing is common. It will take years for Vietnam to evolve into using more efficient pricing methods as it took China decades to reach where they are today.

Another example of pricing accuracy. I believe that Vietnamese factory owners look at their profit and loss statements to gauge the accuracy of their price. If they turn a profit for the month or year then their Vietnam price is right. In a price breakdown, you have fixed costs like fabric, trims and accessories which are easy to determine. The rest of the price components are more difficult to ascertain. Price components like electricity, water, upkeep, labor, government fees and capital investment are not easily broken down as line items in the bill of materials for each garment. Basically, factories are guessing what the non-fixed costs are per garment. They guess on the high side to protect themselves.

The final reason that the initial Vietnam price is higher than your China price is because of fabric. 70% of the garments produced in Vietnam are made from fabric produced in China, Taiwan or Korea. When Chinese buy fabric from Chinese partners, they get sweetheart deals compared to the price Vietnam buyers pay. The price difference gets even bigger when a Vietnam sewing factory buys small quantities through wholesalers. Then there is the added transportation from China to Vietnam. If imported fabric is not re-exported as a sewn garment within 280 days then 10% duty must be paid to the Vietnamese government. Finally, there is the hidden cost of handling defective fabric. If fabric from China is received and 20% defective, who pays for the cost of getting replacement fabric? Fabric sourcing is Vietnam’s Achilles’ heel.

Yes, there are many large fabric producers in Vietnam like Tiong Liong, Huge Bamboo, Hualon and Formosa who can produce quality fabric cheaply. But, they have long term contracts with the Nikes of the world that use the majority of their capacity. What little capacity is left to sell locally is sold at a China +1 price.

It is important to note that when I refer to Vietnamese factories, I am not including factories operated by Chinese, Taiwanese or Koreans. These foreign owned factories in Vietnam offer the BWP because they bring with them decades of industrial engineering experience. They can hit the Walmart price. They typically are fully vertical or have sweet heart deals with fabric suppliers in China. Good luck getting in. Their MOQs usually start with 5,000 pieces per style per color.

So, what can Vietnamese factories do to offer a price lower than the China price. They can source cheaper fabric, improve their efficiency and qualify for free trade agreements.

What can buyers do to get the BWP in Vietnam? Know your China price to have a reference point. Add a bill of materials to your professional tech packs to facilitate breaking down the price of every component. Pro-actively source fabric, trim and accessories on your own to, again, have reference prices. If you feel that the factory is not efficient, then ask why and encourage them use new technologies like automation, fabric cutting software or templates to improve their efficiency.

If you have a supplier in China that is delivering then focus your energy on building that relationship and innovating together with them before investing time and money searching in a new country like Vietnam. It’s not realistic to just fly down to Vietnam, meet some new factories and place orders. Vietnam has its language and cultural barriers that take time to adjust to as in any foreign country.

There are opportunities in Vietnam and Vietnamese factories are improving every day. If you are dead set on sourcing production in Vietnam then I can introduce you to many factories and you can work with them directly to begin the courtship, start the discovery journey. One thing you can count on is good food, nice weather, friendly people and easy transportation.

Contact us to learn more about our sourcing company in Vietnam services.